A simple swap to boost growth and improve national security

Sanctions enforcement for environmental gain

Politics often involves conflicts between multiple agendas you’d ideally like to support, and one of the most important roles of political leadership is to dig in and find ways to achieve reconciliation.

Joe Biden has much deeper experience in the legislative branch than any recent president, and when it comes to getting bills passed, I think he has performed much better than the average president. I doubt this is a coincidence. I think one reason he’s done so well is that, as a legislator, he learned how to listen to what people are asking for rather than (as I think Obama tended to) tell them what he thinks they should want. The results of a good legislative bargain aren’t always pretty, but they reflect the intrinsic properties of American political institutions, and the best thing you can do as a legislator is understand how those institutions work and function within their confines.

When it comes to decision-making internal to the executive branch, though, I think the lessons Biden learned as a legislator have served him less well.

No administration is a unitary actor, and even as singular a figure as Donald Trump is subject to outside forces and constraints and complaints from inside his political coalition. But a president does have a greater ability to crack heads and shape the agenda inside his own administration than a legislative leader has. You can’t just blow off stakeholders and partners, but you do have a greater ability to nudge them to recalibrate their position rather than just listening to what they say. And I think you have more scope to negotiate on the basis of principles (what end goals are the stakeholders trying to achieve?) rather than positions (what specific things are they asking for?) by negotiating across policy domains.

I think this is particularly striking when it comes to the global supply of fossil fuels. The Biden administration seems to have cordoned this off into two silos:

• In silo one, related to sanctions enforcement, diplomatic objectives are balanced against concerns about the state of the global economy.

• In silo two, related to management of federal lands, climate objectives are balanced against concerns about the state of the global economy.

If the administration bargained across these silos, they could achieve a strictly superior outcome, one in which the fossil fuel output of the United States is higher, but that of Russia, Iran, and Venezuela is lower. Of course, there aren’t literally dials on the president’s desk that can turn the US up 10 percent and Russia down 10 percent.

But there genuinely are policy tools here. And when I ask people why this kind of bargaining isn’t happening, they generally offer political explanations: the environmental movement stakeholders care about silo two and not silo one, so they get some (but not all) of what they are asking for and nothing that they aren’t asking for. This strikes me as a Senate Majority Leader mentality about how to run the government and an area where Kamala Harris — a more forceful personality whose career has primarily been in executive roles — could generate a better outcome. And I think it could be as simple as insisting that all the relevant people get in a room for a meeting with her, and then taking the obligation onto her own shoulders to explain to the country what she’s doing.

The current tradeoffs are weird

Jeff Stein wrote a great piece recently about the growth of sanctions as a tool of American foreign policy across the past four administrations. There’s a lot to say about sanctions, but for our purposes, the most salient thing is that the economic damage of sanctions goes in both directions. You can’t go to a store and buy Cuban cigars, which is supposed to hurt the Cuban economy. But it also hurts the welfare of American consumers. This happens to not be a huge deal since the US market is very large and there are other countries that make cigars and also smoking is bad for you, so damaging the consumer welfare of cigar smokers isn’t the end of the world.

But when it comes to the production of economically important commodities, like oil, we’re striking a delicate balance. Crushing the oil output of a country we don’t like could be good for national security. But oil scarcity inflicts a lot of harm on the global economy.

So we constantly get reports like:

• “While Treasury officials want to knock Russian tankers out of commission, economic advisers inside the White House worry that would risk inflaming oil prices this summer and push up U.S. gasoline prices, which could hurt Mr. Biden’s re-election campaign.” [NYT: July 7, 2024]

• “The Biden administration is considering ways to impose new limits on oil sales by the government of President Nicolás Maduro without increasing the number of Venezuelan migrants, raising U.S. gas prices or angering other Latin American governments.” [Washington Post: March 30, 2024]

• “Biden unlikely to cut Iran's oil lifeline after Israel attack” [Reuters: April 16, 2024]

I’m not sure whether the administration has struck the right balance on all these issues, but they are genuinely trying to balance two reasonable considerations: We want to use sanctions to harm the economies of hostile states, and we want to minimize economic harm to ourself and our allies. This is a somewhat tricky balance to strike, and the relevant officials seem to spend a lot of time trying to figure out how to do it.

At the same time, the Biden administration has raised fees for oil and gas drilling on public lands and moved to keep certain parts of Alaska off-limits for natural resource exploitation. These moves to restrain production are, to be clear, fairly mild. More oil and more natural gas have been pumped under Joe Biden than under any president, ever. It’s not an administration of eco-fanatics; it’s an administration that is balancing the economic benefit of oil and gas production against the environmental harms associated with these things.

The problem is that it doesn’t really make sense to consider these issues separately. If restraining domestic oil and gas production has environmental benefits, then restraining foreign oil and gas production should have those same benefits. By turning one dial clockwise and another dial counterclockwise, you should be able to hold oil and gas output constant but shift a larger share of it to the United States. That would be better economically, and tougher on our adversaries, while generating the same environmental outcome. You just need to consider the landscape of issues holistically.

Making deals across silos

As best I can tell, the reason this kind of swap doesn’t happen is because as a political matter, environmental groups lobby on domestic fossil fuel production and not on sanctions enforcement. Nobody is presenting my idea about this at a big meeting of all the relevant stakeholders from all the relevant agencies, because there is no such meeting. At least, that’s the impression that I get talking to economic policy officials. They’re sometimes in meetings with national security hawks and sometimes in meetings with environmentalists, but never in a meeting with the hawks and the environmentalists where it might be possible to persuade the environmentalists to get what they’re looking for on the national security side.

One reason for this is a kind of myopia on the part of national security hawks.

Another is the environmental groups’ misguided theory of political change that puts too much weight on breaking the political power of the domestic fossil fuel industry and not enough on dealing with the global emissions picture.

In addition to climate change, these groups also care passionately about localized issues like land conservation, which is of course a valid concern. But it’s one thing if a community wants to prioritize preservation over economic development and another thing entirely for Democrats in DC to tell Alaskans that Alaska has to prioritize preservation. Is the juice worth the squeeze on that? The climate impact of fossil fuel extraction in Alaska, by contrast, is a global issue and everyone has a right to care about.

But precisely because it’s a global issue, environmentalists should be open to taking their wins vis-a-vis Russia rather than vis-a-vis Alaska and Texas. American drilling operations are, if anything, better regulated than those in foreign autocracies, both because of EPA oversight and also because we tax methane leaks and our adversaries do not.

It takes a president

So why hasn’t the Biden administration already done this?

One issue is that from the very beginning, this administration has suffered under the strange idea that it’s smart politics to make themselves seem less moderate on climate issues than they really are. I don’t understand why they think this is a good idea, and I hope that Kamala Harris’s team will be more sensible.

But another is that this is the kind of issue where Biden’s relatively low-key persona has served him poorly. In a lot of ways, I think he’s made a virtue out of weakness. By being more pliable than Trump or Obama, he’s gotten a lot of legislative wins out of narrow margins. I also think an underrated success story of the Biden years is the extent to which he’s limited countermobilization against him. There are analogs to the Tea Party or the anti-Trump resistance out there, but Biden just does not inspire hatred or terror the way that other, more forceful politicians of the recent past have.

But this is the sort of issue that requires an aggressive, high-level decision-maker whose responsibilities cut across policy domains, a leader who is assertive vis-à-vis the people in the policy silos, but also vis-à-vis the advocacy groups. He needs to tell them to care about different stuff than the stuff they currently care about, that he is offering them a fair deal, and if they reject it, he’s going over their heads and addressing their supporters directly. That’s not Biden’s style, it’s not how he’s approached any aspect of his presidency, and it’s not clear to me that, at his age, he has the capacity to do it. But it’s an example of the kind of situation where a younger, more charismatic, and more forceful personality could conceivably drive a better policy outcome.

And the swaps could even get bigger: Building trades unions tend to like fossil fuel projects, and by giving them some wins, you could conceivably ease off on certain protectionist measures and further improve America’s economic and strategic situation. It all comes from rejecting interest group demands as given, and instead thinking about what their interests are and how better deals can be configured. Biden’s approach got him very far with legislation, but it’s hard to get big legislation done in a second term (or a de facto second term, as Harris will have). It’s important to get this kind of stuff internal to the executive branch right, and I think Harris has a good chance of achieving a better result.